Crude Oil Price Forecast – Crude oil markets continue to look soft

Friday was relatively quiet in the crude oil markets, at least in comparison to the rest of the week. We are sitting on a certain amount of support, but at the end of the day the reality is that we are in a negative market.
Christopher Lewis
Crude Oil daily chart, July 22, 2019

WTI Crude Oil

The crude oil market initially tried to rally during the trading session on Friday but gave back quite a bit of the gains. By doing so, we are testing the $55 level and that of course is large, round, psychologically significant figure. That being the case, if we were to break down below it it’s very likely that the downtrend should continue. I think that the $50 level underneath is going to be a massive support, and at this point it’s likely to be a downtrend just waiting to happen. I think that bounces at this point will probably be sold, as global demand is weakening.

Crude Oil Inventories Video 22.07.19

Brent

Brent markets also tried to rally initially during the trading session but also pulled back just a bit. Ultimately, the $60 level underneath is a target, as it is a major support level and a large, round, psychologically significant figure. If we were to break down below that level, the market could go much lower, perhaps down to the $55 level. Rallies at this point are not to be trusted, as the 50 day EMA above is a significant resistance barrier, as well as the $65 level. I do believe that we will see a short-term rally, but that rally is a selling opportunity. In fact, I have no interest in buying Brent, because quite frankly things are starting to look very bearish for crude oil in general. Ultimately, rallies are to be faded going forward until attitudes change.

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